OFT to investigate ‘quick house sale’ firms

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Homeowners have been warned about the 'unscrupulous' practices of some companies that promise to sell their house quickly.

This follows an announcement by the Office of Fair Trading (OFT) that it will be investigating three firms for alleged unfair practices that left some sellers tens of thousands of pounds out of pocket.

Quick house sale companies offer to either buy your house or find a third party buyer very quickly, and pay cash for your property, usually at a discount from its full market value.

However, the OFT said it has uncovered instances where firms had reduced the initial price offered by up to 53% at the last minute, when the seller had already committed to the sale, as well as attempting to lock homeowners into contracts with heavy penalties if they sell to someone else.

The regulator also said it had found that some firms were exploiting vulnerable homeowners, including elderly sellers who were suffering from ill-health, homeowners heading for repossession, and those who were under pressure to stop a property chain collapsing.

Yet the regulator did reiterate that it had found the quick house sale sector to be largely dynamic and innovative, with many businesses dealing with customers in an open and fair manner, and only some giving the industry a 'bad name'.

"Whatever circumstances lead someone to sell quickly - for example age or health related reasons, as a result of divorce or relationship breakdown - it's vital for home sellers to fully understand their options so they can make the right choice," said Caroline Rookes, CEO of the Money Advice Service.

"Our advice is to think carefully about why you're selling and what your priorities are. If selling your property quickly is more important than getting the best price, then you might decide that using one of these companies is worth it.

"However, be prepared to end up with about 75% of your property's value. Also consider the alternatives, you might find that the amount you need to drop the price by is less than the typical 25% discount that a quick sale company would ask for."